Much has been published about ecommerce barriers in Southeast Asia. This article on PaymentsJournal emphasizes the need for developing ecommerce markets, but acknowledge the complexities within the region. Using Colombia and Thailand as key case studies and insight from A.T. Kearney’s research, it highlights the opportunities for cross-border sellers who should be looking to developing upcoming markets as mature ones are experiencing a slow down.

Offshore merchants have an opportunity to infiltrate a market such as Thailand, if they can jump through the ecommerce barriers in Southeast Asia. The ability to localize offers, support local payment methods and cope with the changes in developing markets will take companies a long way. For example, Thais are very comfortable with shopping on mobile, so a business would do well if they optimize mobile commerce.

Thailand Overview

According to the research published by A.T. Kearney, Thailand’s ecommerce value is projected to grow at 25% year over year through at least 2017. With Thailand’s young population (47% between age 25 and 54), nearly 1/3 of the population is under 25 which means a large influx of future online consumers waiting to enter the market.

ecommerce barriers in ASEAN

Over half of digital buyers in developing countries distrust online payment systems

Ecommerce barriers in Southeast Asia

Industry analysts have projected high hopes for Southeast Asia, with the recent Google and Temasek Report predicting the region’s internet economy growth to reach $200 Billion. There is a lot of buzz surrounding the industry’s potential, but there has also been a surge of commentary which points out regional roadblocks.

The three main roadblocks are:

  • Difficulty surrounding online payments
  • Logistical complexity, especially in Indonesia
  • Compliance to local laws and regulation for global companies

Solving ecommerce barriers in Southeast Asia

Increase broadband access: Use state-aid funding if needed. Cross-border connectivity needs to be stronger.

Support the local players: Improve funding access so that startups have cash flow to scale, not just start. Encourage local partnership with global companies, especially in logistics and fulfilment. Raise awareness of local marketplaces.

Improve and promote e-payments and e-wallets: Startups that are facilitating other businesses with new payment platforms, such as Indonesian credit based startup FinAccel and India based Paytm are helping to disrupt the payment industry, coming up with solutions to encourage consumers to purchase goods through e-payment, rather than use the trusted method of cash-on-delivery, which is harder for businesses to manage.

Improve logistics and trade efficiency: DHL recently published research about trade possibilities in Southeast Asia, ASEAN opens up various trade opportunities, which goes on to impact cross border ecommerce. Supporting e-retailers by forming logistics partnership would also be beneficial, especially in terms of assisting in regulation compliance.

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